tv Power Lunch CNBC October 9, 2012 1:00pm-2:00pm EDT
we are doing final traced. jb, you are first. >> apple, like it. >> murv? >> second that, long apple. >> wow. joe t.? >> exxonmobil. >> health care is it becoming the new grid sector? >> follow me on twitter at scott walker cnbc and power starts now. lace them up. halftime is over. the second half of the trading day starts now. indeed it does. speaking of apple, you know is shaping up to be a rough afternoon when you are using apple and correction in the same sentence. tech and materials taking a hit as the markets start the second half of the trading day in the red. we are going to help navigate you through that. yum brands reports on day one of earnings season. what's on the menu and why their earnings may be a key economic indicator of global growth. and free fuel for years. would that get you to buy that car? find out why honda is offering a big deal for a little car. but we begin with the markets.
tyler's off today. simon hobbs is my partner for the hour from the nyse. a lot of pressure in this market today, simon. >> let kick off with the markets. the s & p falling for a third straight day. the nasdaq 100 breaking below its 50-day moving average. intel and certainly apple are weighing on tech he is today. commodities also on the move a big move on oil. full team coverage on cnbc. sharon epperson at the nynex and rick santelli just off camera with breaking news on the bond markets. let's begin with bob here. big move on tech and discretionary. >> 3-1 declining advancing stocks on the flat line until 10:30 or so when the your row, yes the your row, started breaking to the lows of day, euro down, dollars moved up, our market, moved down, this is what happened, prior to 11:00 eastern time. look at the s & p 500. you can see we were not far from the flat line and just drifted right down as the euro hit the lows for the day. elsewhere sectors, you know what
is going on with apple, down four days in a row down more than 10% from the recent high, that was september 5th. there's technology, the weak link. discretionary, health care and even industrials also to the downside along with materials that often happens when the dollar moves up. finally, house which held up well recently to the weak side, owens corning came out, simon and talked about weaker 2012. >> bring in kenny pull carry, managing yet, i cap on the floor. what do you make of the move? >> about time, quite honestly. the market feels exhausted. in this 1440, 1460 for weeks. hit our head a number of time, unable to pierce it. this morning, wake up, more negative news out of the world bank, imf, on top of the asian news, european news, nothing getting better. quite honestly, i think the market is backing up. >> when i was on this pro, i think ten days ago, telling me how the market was basing very nicely assert itself higher, to greater highs. >> but i think in the end it will, but right now, as we
move -- got to get through this, right in the market will repair for the negative earnings season that they think. here is what is going to happen. test 1425. by all rights, down 2% from the highs, not any type of a correction. if you want 5, 6, 7%, not anywhere near there. down 1.7% not any big deal. >> is cable tv. everything is a big deal. >> it s. >> sue, back to you. >> cable tv with a ticker. stocks head lower, oil making a big move to the upside in percentages. prices right now moving smartly to the plus side in both brent and west texas intermediate. right now, wti is up better than 3% on the trading session. sharon epperson is track the action at the nymex. >> rally mode all morning with the oil contracts but did see oil prices gap higher right around noontime. and middle east tensions continue to be what fuels this rally. the latest headlines reports that israeli prime minister netanyahu will make a major announcement seemed to spur the
price move higher and the fact that he may have early elections may not necessarily mean much to the oil price. but again, it is a jittery market and any headlines about israel or iran definitely helping prices move high her. syria and turkey, tension there is escalating as well and there the supply fears are that major pipeline that goes from northern iraq through turkey and the fact that 400,000 barrels per day of crude transported through could be impacted. that is what traders are worried about back to you. >> thank you very much, sharon. breaking news in the bond pits, $32 billion worth of three-year note going up for auction. just went off the board. rick san telly is tracking the action at the cme. hi, rick, how did they do? >> i tell you what, a lot of bouncing new baby three-year notes found a new home and done tund earth symbol a. this was an a for apple auction. go through the auction. 32 million three-year note, wi, 1:00 eastern, 35 bid, that's 35
basis points off 35er9d 4 1/2. most would say that the market was really around .348, .349. the auction came in .346. 32 billion threes. 3.56, ten auction average on bid to cover. get this, 3.96, higher than last month's 3.94. i have a 14-year data bay, can't find a higher bid to cover. indirect, 28.8, a little light. directs very heavy, 22.5. dealers took 48.7% of the auction. stellar, stellar demand, top of the hour. back to you, simon. >> thank you very much for that, rick. rick santelli live in chicago. now let's go to greece, where like a biblical daniel, angela merkel went into the lion's den today, marking her first visit to greece since the debt crisis erupt and she was met with very heavy security amid mass protest on the streets of athens. our chief international correspondent michelle
caruso-cabrera has been monitoring the situation. michelle. >> hey there simon. the video tells the whole story, let's show people exactly what happened today. angela merkel arrived, 50,000 protesters in the street, let lead to rioting, video that we have become, unfortunately, all too familiar with moltov cocktails, tear gas being thrown, to highlight the intercontinental tensions, look at your screen. some protesters actually showed up in nazi uniforms with the swastika flags to protest the german chancellor's visit, angry because of austerity measures, angry at germany because germany provides the vast majority of the bailout money they get but comes with conditions that require very, very tough situations for the greek people. angela merkel stood side by side with the greek prime minister today saying that she understands that the greek people are suffering. she is trying to tell them that the reforms will be worth it but she also says there will be no more money. sue, there's going to have to be some more money, the greeks are
running short. the program is running short it is going to come from somewhere. maybe not a direct check from the german people. blab is a back door bailout from the ecb but going to have to happen if they want greece to stay n >> talk about this, michelle and bring simon back n do you think is going tonight ecb is that the learned of last resort if it is not going to come from germany? >> not going to be explicit do something like the country will issue short-term treasury notes, their banks will buy them, bring them to their central bank, give them to the ec. >> about the ecb gives back the cash, the german government pay backed ecb. >> will be law andered? >> it will be laundered money, exactly. >> simon, what do you think? >> or extend the maturities that is the other possibilities. >> i have heard that this -- they begged for that absolutely right, keep asking and the ecb keeps saying no. >> most people think in the end, the way it is going to happen is
through the laundered system through the back door, through the central banks. >> what about spain, michelle some people were posing the question that the greece certain lives the story of the day today with the protests, with ms. merkel going to greece, but spain really is what we need to be focused more on. do you agree with that? >> much bigger, much bigger in size. greece, in the end, is the bigger pictures that we see on television, but when it comes to the actual amount of money, the european union could actually handle that cost. spain is much, much bigger. >> thank you, michelle. simon, over to you. >> also watching, as you will be aware, sue, apple, very closely today. shares officially in correction territory, down 10% from the record high we had. the closing high of $702 back in september 19. a lot of people feeling the pain there. right now, you can see we trade 634.41. we will talk about apple later in the show, sue. >> indeed. we could be entering, simon, the
weakest earnings season this market has seen since 2009. yum brands, which is down about two-thirds a percent today is setting the table for the restaurant industry. it also reports its results after the bell. the stock is up 13% this year, even though in today's downside trading session it is down 43 cents. so, what can investors learn from yum and the sector as a whole? our jane wells is chewing on that question for us from los angeles jane? >> hi, sue, for yum in particular, many analysts expecting the turn around of taco bell to continue but overall in the restaurant industry, as we look at some of the stocks, goldman sachs expects a 3.6% drop in same-store sales for the fast food group. the worst figure in three years. it expects that trend to continue through the fourth quarter, however it sees, "notable upside at panera and yum, saying sales trends remain robust and likely above consensus expectations" though for yum it is cautious on china, half the company's sales come
from. this as yum's taco bell in the u.s. has been making a run at chipotle with healthier menu items. david einhorn last week shorted chipotle, but the chain has a large exposure in california and a devoted following. >> chipotle is incredible. all organic. >> better ingredient. >> what change i would make to chipot chipotle? i would get bacon for the burr receipt snows. >> my family and friends eat at chipotle, they got me onto t. >> yes, all that's missing is bacon in the burritos. duncan and mcdonald's are at risk, believing both had a slow down in same-store sales for q 3. they expect that to continue in the fourth quarter and the perhaps beyond with tough costs. and then this eye-popping line, guys you can goldman thinks the outlook is better for casual dining chain like cheesecake, citing "lower food costs." yes, simon, it says lower food costs here. i haven't seen that line in a
while. back to to you. >> no, jane. we should mention alcoa, of course, also reporting tonight. to housing, sales are up. we know prices are up and mortgage rates are also at record lows but what about the overhang of foreclosures in housings? questions about appraisals and whether, of course, credit availability has ultimately eased? our diana olick is on a real estate tour speaking with agents about where they are in the recovery. diana? >> simon, every day literally, we get another report on the housing recovery. today, fannie mae telling us just 11% of americans think home prices will fall further, the lowest level since the recovery began. still only 19% think is a good time to sell. then new numbers from core logic saying the shadow inventory of distressed properties is down 10% from year ago that's good, right? but still 2.3 million in that shadow inventory. that is why we wanted to come here to the suburbs, bethesda, maryland, and talk to the agents
at a realtors' open house, get an idea what they are seeing from their buyers and theirers because in yet another report today from amherst, laurie goodman, she says the analyst and the headlines overpredicting this housing recovery and that some of the improvements we are seeing are just seasonal. the realtors i talked to said we have come a long way but we are not there yet. >> say we are 15% back in our market ex15% back. we are finally at a point where our supply is less than our demand, so we have more buyers than we have sellers. so, you know, that's great sign. that starts to prop up price and in some cases, multiple contracts, we will see prices go up. >> so, we are getting through appraisals that are difficult still. we are getting through home inspections that are still difficult. and buyers are looking for those opportunity it is they want to back out, that's their opportunities back out.
>> what we are hearing is a lot of confidence in the market is coming from the record-low mortgage rates, but in still another report from capital economic, we are told that mortgage rates could rise again because a lot of this mbs from the fed buying into those securities have been priced already and the rate does go up a bit. we put it on the the blog today. is this housing recovery real? let me just tell you, simon, on the twitter, a big argument. some say yes. some say no. divided ekwally. back to you. >> a big marg e always going to be a long haul. jane, thank you very much, the view there housing. ahead in the program, politics, president obama and mitt romney hitting the swing states big today. and some of the biggest silicon valley investors are planning on disrupting the landscape. as we head to lunch, let's look at the big movers this tuesday on the upside. we will talk about radio shack and upgrade there really moving that stock.
square close to a deal with new york city to get their payment system in about 1,000 cabs in the city, verifone pretty much owns this marketplace now. >> brian, thank you very much. politics now. president obama heading to columbus, ohio, later today. mitt romney, as you see live in this picture, is in iowa this hour. so much attention, of course, on the presidential race, but it's the congressional elections which could have major ramifications on the power play in washington, including how we deem with the upcoming fiscal clif cliff. amon javers has more. >> let's see what the impact is likely to be or maybe not be on the fiscal cliff negotiations and start with the balance of power.
not able to come to an agreement on the debt ceiling last year, they are not able to come to any agreement and the reason is partly because of that huge house republican freshman class of 87 members, 82 are running again for re-election, their fate, how they do in november, might impact debate, but only two are in tossup races, that means democrats have a hard time make a huge dent in the class. it is unlikely that the republican makeup is going to shift dramatically in the house of representatives going into the fiscal cliff negotiations this year and next year. i was talking to john harwood in the hallway before this, he made an interesting point, i want to bring to you, more determinative here maybe than this election can be the two years that these house freshmen spent in office as members over congress.
that debt ceiling debate very searing last year might have an impact in terms of real-world consequences these members are now aware of they weren't aware of when they were candidates. simon, back to you. >> there fore, a willingness to for example, allow taxes to rise to do a deal? >> maybe -- yeah, exactly. maybe a little bit more willingness to do a deal, more awareness of the real world financial market implication of what they are talking about barack obama might be in a dealmaking, he is thinking about his legacy and kick off his second term. >> hope they do a deal eamon, thank you very much. you might think silicon valley is thousands of miles away from the political action in d.c. but new technology and new companies are having a big impact on this year's political races. cnbc's julia bore citizen joins wuss a look at what they are doing and how they are trying to, julia to cash in. over to you. >> well, simon, some of
facebook's biggest backers, sean parker, ben who are wits and peter thiel are betting that it can change politics the way facebook changes the people interact. who a horowitz and packer are on a board of a company that sell seles communication via e-mail . >> general purpose, prime-time software product and deliver at this to the market in a nonpartisan way has taken a technological leap fairly far ahead of anything in the field before.
four years ago, president obama proved the power of facebook and twitter for fund-raising and now have to see the next steps in terms of technology impacting campaigns. and sue, i think it is worth pointing out here that he says that all of the power of this data and what they are doing isn't just valuable widuring campaign season but keep tabs on constituents' concerns year round. >> that would be a good thing. thank you very much. meantime, some new twist and turns in the story that we have been following, that meningitis outbreak. seema mode i did here in studio. >> 105 people infected and 13,000 may have been exposed to potentially harmful contaminated steroid came from the new england compounding pharmacy in
massachusetts. the steroid was recalled which was sent to 23 states. it is used in treating back pain. the cdc and fda are coordinating a multistate investigation among patients who received an epidural steroid injection. the next update from the cdc 2 p.m. eastern standard time today. patients who have had an epidural steroid injection since may 21st of 2012 and have any of those associated symptoms should talk to their doctor as soon as possible. sue? >> thank you very much. on wall street, the street is making calls on johnson & johnson, apple and radioshack today. radioshack up 10% a change for that stock. are those the right calls? we will analyze the analysts coming up next. before the break, a quick look at the most actively traded stocks now.
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out was an undercover officer. he and an associate both under arrest now. joseph romano, flood jail, as i said, serving a 15-year sentence for securities fraud and david mer kovic arrested in west palm, florida. at his arrest, recovered $18,000 in cash and loaded 9 millimeter semiautomatic. authorities broke this up after receiving a tip and getting this on tape from an undercover agent who was posing as a hitman advice is the sitting romano in prison. the name of the judge, the name of the assistant u.s. attorney not released by authorities, again, this undercover murder-for-hire plot broken up by federal authorities in brooklyn. simon, back to you. >> wow, scott, thank you for that breaking news there. let's get to analyze the analysts, i'm here at the nyse with matt chess lock, kick off with goldman sachs. welcome to the program. goldman sachs downgrading johnson & johnson to sell today from a price target of $72, which is virtually where we are trading. they say although j & j has
potential for improved growth, we believe that is captured in valuation. talking about a derth of products in the pipeline. would you agree? >> the stock range-brown from 61 to 69. price target to 72 is right in line. i would agree with that johnson & johnson can overcome anything they want, spending money. saving on r&d having a drug in the pipeline the next five years. >> doesn't do you good if you were a share holder? would you sell? >> better alternatives out there, probably a little negative on the stock at this level. >> talk about radioshack that has shifted today, bank of america, merrill lynch, upgrading radioshack to buy from underperform, they say after a series of negative events, the shares have basically reflected most of the downside risks including the prospect of not a very good set of figures coming through on the next quarter. would you agree? >> usually agree with something like this you look back and see
jc penney, the same thing, new management came in, a whole new structure. you think radioshack, you think batteries, remote-controlled cars, better alternatives to buy products, ebay, amazon. radioshack has a lot to overcome in the near term. stock might not do a lot. 250 the near term. >> almost there. >> we are up 10% today. i'm neutral on this now. >> promise we had would talk about apple. a price target of 710 if on the firm says upside to near-term estimates but there is an upside to near-term estimates but growth looks set to slow to single digits in 2014. so, some time out, they say you are basically going to be very focused on the emerging markets, 710 on apple, a long way away? >> bouncing off the 200-day moving average 628, hit today. the stock relatively unchanged after being down 15 a lot of coverage for a neutral call, 2014 apple could come out with a
new product tomorrow, ipad mini. see what that gets. very reliant on iphone sales now. stock at this level here, better to make a call at 500 or 1,000, i would think, a little more -- >> do you hold apple? >> i do not hold apple, no. a very cultish following. any move back, you could see 660 in a heartbeat. so volatile. >> thank you very much for that. matt chess lock. speaking of cults, gold prices ready to close. we will head live to the nymex for the final traced on that. plus, is wall street still rolling the dice when it comes to risky practices? we will have exclusive data on which banks are the best at risk next. so anyway, i've been to a lot of places. you know, i've helped a lot of people save a lot of money. but today...( sfx: loud noise of large metal object hitting the ground)
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back too "power lunch," i'm sharon epperson at the nymex. gold prices closing here at 1766 an ounce, down about $9. the weakness of the euro definitely a factor. the if a act that theism mf lowered its global growth forecast and great concerns about france, about spain. in fact, etf security says that's what's holding back the gains in the precious metals market, the fact that spain refused to take a bailout. looking at the lowest close for
gold. brent crude touched a new high for the day, above $114 a barge. again, middle east tensions, syria, turkey, also keep your eye on what netanyahu has to say when he makes an announcement later today. back to you. >> thank you very much for that, sharon. let's check in where we are with the equities on the nyse, trimming our losses slightly you 76. >> volume on the light side, 3-1 declining to advancing stocks. as it so happens many times in the middle of the day, euro weaked just before 11:00, our market weakened with it down 80 points, euro hit the lows for the day. major sec to again, tech is the weak group here, of course, apple weakness, but consumer discretionary health care industrials and materials also on the downside. there's not that much difference here between a lot of these stocks, except in the tech sector. i want to mention real weakness in the home improvement group. owns corning on a warning about 2012, really getting hurt today. that is taking down a lot of the home improvement stocks their business, fiberglas insulation
doing well in new homes but replacement business, simon, where the real problem is right now, not as strong as it was in the last couple of years. that is not new homes though. >> thank you very much, bob pisani, a market flash with brian at hq. >> simon, take a look at shares of research in motion. down about 5%. jefferies says the new smartphones they have won't be available until march and that's few weeks later than many had expected. of course, seems like the whole company, simon is relying on this launch to see if them stay in existence. down 5%. back to you. >> okay. let's flip that coin in a sense. apple shares in correction territory, official any correction territory today. bertha coombs following the big movers at the nasdaq. bertha? >> that's right, simon, apple isn't the only thing weighing on the market, intel hitting a one-year low, bernstein downgrading you the stock because of the slow demand for pcs. dell and microsoft, some of the other pc players, are down along with t apple, you take a look, actually has come well off the
lows. take a look at the intraday chart today. a lot of folks watching the technicals here on apple. 631 and change was the august low. we got very close to that this morning and have bounced off of that. a number of traders look at that as an area to buy. applebee let 50-day moving of a ran. the last time we saw that was the end of july. four years after the financial crisis, wall street firms have become batter managing their risk but some still getting called out a bit you case in point, jpmorgan and $5 billion trading loss by the so-called london whale trade. which firms are managing their
risk the best? cnbc's kate kelly has our exclusive survey of bank analysts for us. hi, kate. >> thanks so much. we polled stock analysts to find out whether the big banks are safer now than they were prefinancial crisis. our first question, who has the best risk management on wall street? all but one analyst, in fact, said goldman sachs. but we wanted to dig deeper. we wanted to know disdoes the risk management culture seem strong? can traders override position limits? how do banks stack up on capital and liquidity? once again, interestingly, goldman came out on top. their culture ranks head and shoulders above their peers. their risk limits perceived to be very strong. as well, good capital ratios and liquids, which is much stronger than everybody prefinancial crisis. goldman stockpiles that cash, had 175 billion in spare dollars, at last count. in second, despite the recent london whale debacle, was jpmorgan, gets high marks for
rigor and high excess liquidity. rounding out the bottom were citigroup and bank of america, scores relatively weak any every category, except for liquidity, stronger across-the-board. double-digit improvement industry wide. broadly speaking, analysts believe risk management is better than precrisis and believe that leverage levels a big culprit in the mortgage bust, are lower today. when we asked them what the most important factor informs good risk management, their response was something that had nothing to do with the numbers, empowering risk managers, having good regulators, on the other hand, was their least important factor, sue and simon. take note, fed and s.e.c. on that one. >> interesting that they said empowering risk managers yet when you look at the jpmorgan whale trade that went wrong, you had an empowered risk manager. ina drew was basically one of the best in the business with that yet it points out no matter how tightly you keep the reins
on things and how empowered people are trades like that still can happen. >> that's right, sue. you and i, of course, talking about that just yesterday, i think. >> yep. >> essential any that case, a good one to bring up, what failed from a risk management standpoint remained a bit of a mystery, told a couple of things. one is the position itself, an obscure credit derivatives position in something called the ig 9, there were assumptions built into the trade it wouldn't essentially move that much but in fact, the trade got very crowded and the markets moved against jpmorgan. the other thing i would say quickly, risk managers involved there who were overridden by the traders. their word wasn't taken seriously enough. >> let's bring in neil bine berg, editor and chief of american banker. welcome to the program. are you surprised that goldman does so well in a survey like that? >> i'm not really. i had the opportunity to interview lloyd blankfein before the financial crisis hit and he was a very worried guy and said you have all kinds of models value at risk, so on, more
models and more models and a lot more capital you think you will seed knead a worse case scene nair year, guy at the top spends his nights worrying about things, that's good sign. >> what about came up in the survey repeatedly this idea we are safer here because the culture is stronger in certain instances? isn't culture, in essence, an act of faith? a lot of people were very surprised when jpmorgan, as sue mentioned, had its problems. you let us down, we trusted jpmorgan because of the reputation, because of the culture, wouldn't do this? >> obviously, you need risk managers who are empowered but i think another important ingredient we haven't touched on. namely, how do you pay people? pay people to take outsized risk there is no downside to them and big upside if you are successful or do you not do that? that is an area i think a lot of the banks have not actually reined in things a whole lot. yes, we do have clawback provisions now but still, giving people a lot of incentive to take a lot of risks and i think that the london whale, from all
we know, was a good example of that. >> kate, do you agree with that? >> let me jump in here a second, i don't disagree with what neil said, i want to mention the firms that scored well on this sur acres have jp goldman and morgan sacks, with the exception of the london whale situation, a $6 billion exception, great risk manage n place for years, prior to the financial crisis. i did a huge story on goldman's subprime short in the fall of 2007. this was a position they had on for two years, david yinnier very involved, lloyd blankfein, gary cone, very involved with managing that. how much money could they floz a given day? where were the realtime position these could see on their systems? that kind of activity, guys, wasn't even possible at citigroup around the same time. they couldn't come in on a saturday and have the cfo look at positions from a friday until within the last four or five years. >> very interesting, kate. thank you very much. now, neil, you are going to stick around, we will check back with you in just a little bit. well, are you feeling pain at the pump? a lot of people are. if so, honda wants to give you some free fuel. you heard me right.
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so they can focus on keeping the world moving. with xerox, you're ready for real ness. welcome back to power lunch. brian shactman at the market. shares down sharply, credit suisse downgrading it, saying the monopoly in china is waning, third downgrade in the last two weeks, down almost 7%. simon, over to you. in today's yahoo! finance poll we asked you, today is the five-year anniversary of the market peak. when will the dow reach that level again? 15% say by the end of the year. wow. 26% say next year. 40% say after 2013. and 19% say never, the game has
changed. wow. i expect your -- on street signs, get an update on that with man kim. >> kind of depressing, isn't it? 19%. we are going to debate, simon two central questions on everyone's mind here and around the world. number one, when will america get its groove back and what is it going to take? well, many feel that less government is the answer and we are going to take a look at whether washington should get out of housing all together. and we have got a raging bull and a blue chip name and his case for making part of your portfolio. lots of things coming up on this tuesday edition of "street signs." sue, simon, back to you on "power lunch." >> thank you very much, man way. so much talk about higher gas price and honda is jumping in with an offer of free fuel for up to three years, if -- if you buy a certain honda civic.
>> honda out with a promotion saying if you buy this car, you will get a $3,000 debit fuel card that $3,000, according to honda, cover two to three years worth of nat gas in that civic. honda is hoping clearly to stoke some more interest in the cng version of the civic. they sold just a little over 1500 this year. compare that with almost a quarter million in seams for the standard civic models. this debit card being offered through clean energy. they have got about 160 stations around the country but the most of those, simon, are out in california, where people will take advantage of that. >> so they hope, phil. thank you very much for that update. breakthroughs in cloud technology are not limited to google, amazon and microsoft. box is making its play to be the leader in the enterprise storage and data management space. it says it's added 80% of the fortune 500 as clients since it launched seven years ago. jon fortt joins us live with
more on what is clearly an innovative company, jon. over to you. >> thank you, simon. here with aaron levy, ceo of box. you did announcements out there. we have seen oracle sales force, others, coming out talking about owning the cloud. you have got your own vision, raised $287 million to do it. what did you announce today? >> so, we announced a brand new technology that allows you to take box, thus take your content and information you have in your business and extend it to a whole bunch of other applications you can work from. so, concur, cornerstone, net suite, jive, a punch of public sass and cloud companies, even oracle fusion, crm, take your content anywhere in those applications. >> given their the provocateur now, taken marc benioff's face, sticking your finger in the eye of microsoft. >> no. no. >> partnering with you here, 287 small lot of money, they have got more than that. >> we think as a startup, we
have an unfair advantage. we focus on a new kind of business model, a free product that allows people to bring the technology into the work play, use it instant labor day fundamentally, building technology for the way the world works today versus the way the world worked five or ten years ago where a lot of the legacy companies are stuck. >> microsoft, for example, beaten up on them, share point being hard to use, bought jaromir this summer for 1.2 milli billion. if they figure this out, what this he beat you? what keep us standing out? >> have you look at the history of microsoft's yammer guys. microsoft a great partner of ours. think of windows 8 tablets, we want to build an amazing experience how people access information on those devices. one hand, competing with microsoft and we think is a great sur plier at ways you will
get to the box content. >> going public in the next year what are the chances, 50/50? >> this would be the wrong show to talk about that one on. >> not going to answer. back to you guys. >> actually talk to is the right show. it is the perfect show to talk about that. up next, mayor bloomberg says a proposed tax on new york's wealthiest is the dumbest thing he's ever heard of and he knows a lot of friends in that 1% bracket that might simply pick up and move if the plan was ever put into place. that story and much more in today's power run down, right after a quick break, with the dow jones industrial average off about 78 points.
time for the run down, bob pisani and neil weinberg with their swords of truth and justice to hack away at today's news stories. five years ago today, the dow and the s & p 500 closed at its all-time high. so what is -- what do we learn for the 1,827 days since that fall? >> 1500 on the s & p to 750, cut in half in a year, from 2007 -- 2008 to 2009. what i would say we learned is
you better have an entry point and exit point you feel comfortable n if buy and hold is your film loss, if i fine. better know when the s & p drops in half, what are you going to do about it? you have to get your own sense how comfortable you are investing. >> neil? >> the market shown sense. seeing financials down 50% but seen things like consumer staples doing pretty well. people are out there shopping again. we don't really know what condition the financial industry is in. there's some rationality going on. >> let's move on. black rocks chief larry fink writing an op ed on twice restore confidence in the financial markets, bemoaning the way in which the money market industry, $4.7 trillion has not acted with the sort of trust you might expect. have you looked a it the? >> i looked at it the reforms around the money market make sense. shapiro tried get this through, couldn't do t want to mark to market, some of their assets, not have this break the buck thing. we get rid of that, that's fine.
talk about holding a capital buffer see. why the industry pushes back that will reduce their profitability you increase their cost. they don't want t. >> no question this is a $4.7 trillion industry, so the mutual fund industry in particular, which has very potent friends in washington, don't want to see any curtailment here and the problem is, of course there's a fiction that you won't break the buck, we saw during the financial crisis, of course, you can break the buchblgt. >> mark to market, they have to round up, mark everything to $1. >> what shapiro wasn'tible to do now perhaps tim geithner will trial. >> finally from capital new york, mayor michael bloomberg believes raising local taxes on new york's wealthiest is now about the dumbest policy he says that he has ever heard of, on
the basis, bob, those that pay the majority of taxes could leave the city and presumably go to jersey. >> a real hornets nest. funding preschool what this is all about, certainly enviable, important thing for people to do i can get a long list of other thing ease kwally important as well. not sure that people should necessarily be paying all of that more to live in new york. we all know that i think you know the cost of living in new york is pretty high already. >> it's high. obviously, the people that have a lot of money can afford to leave or arbitrage the differences in tax rates by going to offshore havens, texas or florida or delaware, somewhere like that if you think that your going to make things dised a van table joyce to the rich and pay the taxes, they will just hire lawyers and accountants. >> have you tried having no taxes in florida but working in new york? they will find you out, you know. they are ruthless. >> if mitt romney thought it was to his advantage to release his tax returns, we have released them, right? >> okay. i believe you. neil, nice to see you. thank you very much, bob. next on the program is facebook -- that's the bell.
is facebook the next myspace, the always outspoken michael wolf thinks so. he will join street signs to make his case and what it means for facebook's stock. wow. don't miss the ceo of conagra foods on "mad money" tonight at 6 p.m. eastern. this is cnbc. you. we know you. we know you have to rise early...
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look at clr, continental resource, came out and said they want to trim their production and rearselves by the end of 2017 and up 3 1/2%. sue, that has too do with north dakota, where i will be live a week from today reporting on part of their story. look at wall street now, a downside day from midsession, off of our worst levels of the day, now down 77 on the dow. nasdaq hit hardest percentage wise, off 1.25, apple moving
into correction territory, taking its toll on the nasdaq, s & p 500 at 1445, down about 10 point or almost three quarters of a percent. simon? >> thank you. ask matt chess lock here, how concerned should we be on oil? >> it is pretty concerning. we start to get bearish on oil, broke below 90. not seeing that now. seeing it spike up. see a spike up on geopolitical news, maybe see shorts cover and this thing back at 100 in no time. >> as we move toward earning season kicking off, close today on al quo wa and yum brands report, which do you think is more important to the market? oil at this level moving higher or the forward-looking statements from the ceos? >> probably go hand in hand. oil goes up, less the consumer can spend. that affects yum as we go forward. yum will have an impact on what consumers spending. not so much alcoa, but is a sentiment